Even Apple and Amazon have been hurt by supply-chain woes and labor shortages

Even Apple and Amazon have been hurt by supply-chain woes and labor shortages

Even the COVID-19 pandemic’s largest company winners cannot escape a number of the largest issues now plaguing the economic system. Apple and Amazon warned Thursday that world supply-chain snags and U.S. labor shortages will dent their earnings and worsen heading into the vacations.  

The tech giants are grappling with a scarcity of semiconductors, larger delivery prices and metal prices, and an inadequate variety of truck drivers, which has delayed deliveries. These traits are more likely to intensify over the following few months, Apple and Amazon famous in asserting their earnings on Thursday.

Shares of each corporations fell on Friday.

Apple CEO Tim Cook dinner estimated the corporate misplaced $6 billion in third-quarter gross sales as a result of it could not sustain with buyer demand. The corporate expects a good greater hit within the final three months of 2021 on account of provide constraints, Apple’s chief monetary officer warned buyers on a convention name.

Although Apple’s income climbed 29% to $83.4 billion within the three months ending in September, it fell wanting analyst forecasts. Income soared 62% to $20.6 billion.

“It’s not a demand issue but a supply issue that continues to be the elephant in the room for Apple,” Wedbush Securities analyst Dan Ives wrote in a analysis word.

At Amazon, merchandise had been redirected to achievement facilities with enough workers to obtain packages as a labor scarcity intensified. That meant longer and dearer routes within the third quarter, including $1 billion in prices. The corporate additionally absorbed roughly $1 billion to pay for for wage will increase and different labor prices.  

Amazon now pays a mean of greater than $18 per hour, with some wages as excessive as $21, relying on shift and location. It is also paying signing bonuses of as much as $3,000, the corporate stated. That ate into revenue. 

Amazon reported $6.2 billion in third-quarter earnings, simply shy of the $6.3 billion in the identical three months final 12 months. Income soared 15% to greater than $110 billion. 

These larger labor and supply prices might wipe out profit altogether within the final three months of this 12 months, the corporate forecast. For the fourth quarter, Amazon stated it expects to incur one other $4 billion in prices.

—The Related Press contributed to this report.

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